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Investing.com - Keefe, Bruyette & Woods reiterated its Market Perform rating on Progressive Corp. (NYSE:PGR) with a price target of $288.00 on Wednesday.
The research firm raised its 2025 and 2026 earnings per share estimates to $16.20 and $14.85, up from previous forecasts of $15.25 and $14.65, respectively. KBW also introduced a 2027 EPS estimate of $15.85 for the insurance company. This optimistic outlook aligns with broader market sentiment, as 16 analysts have recently revised their earnings estimates upward, with Progressive currently trading at a P/E ratio of 17.4x.
The upward revision follows Progressive’s May 2025 earnings report, with KBW citing faster investment income growth, larger reserve releases, and lower expense ratios as key factors driving the improved outlook. These positive elements are partially offset by expectations for higher core loss ratios.
KBW expressed concerns about near-term pressure on Progressive’s core loss ratio, attributing this to normalizing frequency benefits and limited earned rate increases. The firm also noted decelerating policies-in-force growth as competitors’ rate increases moderate.
The $288 price target represents 19.4 times KBW’s 2026 earnings estimate, with the firm maintaining its Market Perform rating due to expectations of less shopping behavior that typically highlights Progressive’s competitive pricing advantages.
In other recent news, Progressive Corporation reported a significant 353% increase in net income for May 2025, reaching $1.07 billion compared to $235 million in the same period last year. Earnings per share rose to $1.81, far surpassing Barclays (LON:BARC)’ estimate of $1.22. The company achieved a notable combined ratio of 86.9, representing a 13.5 percentage point improvement from the previous year, although net premiums written grew by 11%, which was below expectations due to timing differences. Barclays maintained its Equalweight rating, while Raymond (NSE:RYMD) James reiterated an Outperform rating, citing confidence in Progressive’s ability to sustain a favorable combined ratio.
Keefe, Bruyette & Woods held a Market Perform rating, adjusting their earnings per share estimates upwards for 2025 and 2026. Progressive’s April 2025 results also showed strong performance, with net income more than doubling to $986 million and an 11% increase in net premiums written. Policy growth continued, particularly in personal lines, with a 17% increase to 35.8 million policies in May. Despite a slight slowdown in policy-in-force growth compared to April, Progressive remains a key player in the insurance market, benefiting from operational efficiencies and strategic pricing.
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